Our family has been approached to do seismic testing on behalf of the oil gas comany we have our minerals leased to. We signed up in 2008 when things were pretty quite, needless to say we were pretty ignorant to what was happening in the area and agreed to terms much less than what the market appears to be compensating mineral owners.
Question: are we in a position to possibly re-negotiate our lease contract if we hold out on allowing testing?
Any thoughts or similar experiences?
Lucio: Check your mineral lease agreement and see if you have a clause that specifies that the Lessee has the right to contract for seismic operations on the leased premises. I believe this is standard in mineral leases today. So it would be in your interest to negotiate a fee for the seismic permit and have the seismic survey performed as it would be helpful to the Operator to determine the best locations to drill. The last seismic permit fee’s I have negotiated were in the Gulf Coast area and was 25 bucks per acre for 3-D seismic program.
Dear Lucio,
It makes no difference if the lease specifically allows seismic testing. The Texas Courts have held that the full exploration rights clause by its nature grants that right, so silence as to seismic grants the right. Contrast with Louisiana, where the right to conduct seismic has to be spelled out in the lease form itself.
For you to block them, your lease form would have to specifically state that no geophysical rights were included in the grant, or that the Lessor expressly reserved all rights to conduct seismic surveys, etc.
My lease form is framed to reserve the seismic privileges. That way we have much more control with a Seismic Data License, i.e. single use, term, damages if not performed, access to data, ability to grant multiple Seismic Data Licenses etc.
I doubt that you can trade up.
If you are the surface owner, the real approach that might have been made to you is to request access across your surface. They have that right, anyway, but will always want a permit, so that liability and damages can be set, along with other things -- gates locked, no trash or debris, etc. Without a Surface Permit, they could not use any improvements to the property, such as roads, bridges, etc.
Thanks for the information. I dont think I have a leg to stand on but though there may be a re-negotiation possibility given they are wanting further consent with consideration. It seems to me though if they had the right to do seismic testing them why would they be asking permission and offering additional compensation? I would think this would be addressed in the initial agreement.
Where is your property located in Atascosa county?
Close to Charlotte, TX
Dear Lucio,
Do not look a gift horse in the mouth. However, do NOT sign the permit that they present you with. There is a real opportunity to be dollar wise and pound foolish in this business. Ask any landowner.
Thanks Buddy. I appreciate the advice.